Vacation HomesThis is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words’¦

As the warm vacation season approaches, the outlook for summer home buying is the brightest it has been in several years. In fact, 2008 may be the best time to buy a vacation home since 2002.

Prices have been repeatedly pummeled until they are now unrealistically depressed, even for this historical market downturn. Thanks to the current undervalued market you can buy vacation home properties in highly desirable locations for a cost that represents deep discounts from the norm – and – in some cases – bargain basement wholesale valuations.

  • Prices of vacation homes – especially low maintenance condos – are super-attractive. At the same time – thanks to drastically lower interest rates and emergency legislation to stimulate the housing market – financing is getting easier and less expensive.
  • Congress, in an effort to stimulate the sluggish upscale housing sector, just raised the limits of conventional mortgages. Now you can buy luxury getaways worth up to $729, 750 without paying a premium for “jumbo” loans.
  • Vacation homes prices are typically about 10-15 percent lower than those of primary residences, making them even more affordable as the buying season begins in this historically cheap year for USA real estate.
  • Recent statistics on the so-called housing bubble show that when it peaked in 2006, there were more than 50 overvalued markets across the USA. Today only about 20 remain – so that affordability has gained ground in rare regions such as California, Florida, and even Hawaii.

Another interesting fact is that the NAR’s latest annual report on vacation properties found that almost one out of every three vacation home sales was a condo. Contrasted with figures from 2006, when single family homes accounted for almost 70 percent of the vacation home market and only about one in five holiday homes were condos, that shows a significant trend toward condo ownership.

The best bargains in the country are in Florida. Historically speaking, Florida real estate has outperformed other investments, including most real estate investments elsewhere in the USA.And within Florida the greatest deals can be found in the condominium market, especially in the southern part of the state.

  • Today’s prices are lean and competitive, and offer excellent value for buyers. Builders are offering free upgrades, special financing arrangements, and deep discounts during this cyclical downturn.
  • New higher limits on conventional loans – part of the multi-faceted economic stimulus legislation recently passed in Washington – also make it considerably easier to finance luxury properties like beach homes.
  • Conventional financing normally covers only mortgages up to $417,000. But an emergency measure passed by the Office of Federal Housing Enterprise Oversight almost doubles that amount, at least until the end of this year when the new limits are scheduled to expire.
  • Nearly 75 percent of south Florida’s condos now qualify for these relaxed loan limits, which means it is possible to buy now for lower rates of interest and fewer closing costs.

The same is true throughout the USA and even applies to beach property and vacations homes in such pricey markets as California and Hawaii. But the opportunity to capitalize on this unique confluence of current market conditions may soon expire. Already the National Association of Realtors (NAR) has reported that sales by homeowners rose almost three percent in February, the first month-over-month rise in annualized pace since July of 2007. Miami’s reputation as a world-class vacation destination – combined with cheap prices and weakness in the value of the US dollar – has already begun to attract foreign buyers of vacation homes. And a new tax bill for local Florida residents is adds another incentive to buy second homes in the state.

Meanwhile the stock market, which has always offered the biggest competition to real estate as a long-term nest egg investment, still languishes after nearly a decade of disappointing results. Investors – especially 78 million Baby Boomers who began to hit retirement age two years ago – have starting looking to real estate as a more reliable and lucrative asset. As the stock market continues to lose value, much of that money moves into real estate where tax incentives, upside profit potential, and the idea of owning your own vacation home is a powerful motivator.

The majority of Baby Boomers are mortgage free, travel further distances than any other age group, and spend 40 percent more time vacationing now than they did a decade ago. Over the next few years they will have a tremendous impact on the market for vacation homes, fueling a renewed resurgence in prices and a shrinking of inventory. So if you have been considering the purchase of a holiday home, you may want to spend part of your springtime shopping around for bargains while they last.

To find a qualified Realtor to help you in find a vacation home or other property, visit www.GayRealEstate.com or call toll free 1-888-420-MOVE (6683). The experienced members of this network specialize in serving the global GLBT community.

More about Jeffery Hammerberg
Jeffery Hammerberg is Founder and President of Gay Real Estate, Inc. – the nation’s largest group of companies connecting gay & lesbian home buyers and sellers to gay, lesbian and gay friendly real estate agents. Since 1997, Hammerberg has created a virtual real estate marketplace for the LGBT community.